Consumer Financial Services Law Monitorhttps://www.consumerfinancialserviceslawmonitor.com
monitoring the financial services industry to help companies navigate through regulatory compliance, enforcement, and litigation issuesMon, 11 Dec 2017 15:11:34 +0000en-UShourly1https://wordpress.org/?v=4.7.8Ohio Appellate Court Dismisses FCRA Class Claim for Lack of Article III Standing, Citing Spokeohttp://feeds.lexblog.com/~r/ConsumerFinancialServicesLawMonitor/~3/trcqFcO57-c/
https://www.consumerfinancialserviceslawmonitor.com/2017/12/ohio-appellate-court-dismisses-fcra-class-claim-for-lack-of-article-iii-standing-citing-spokeo/#respondFri, 08 Dec 2017 15:09:48 +0000https://www.consumerfinancialserviceslawmonitor.com/?p=6429Continue Reading]]>On December 5, a Court of Appeals for the state of Ohio affirmed dismissal of a putative FCRA class claim against Ohio State University on the basis that the plaintiffs lacked standing to assert their no-injury, statutory claim in Ohio state court. The state appellate court declined to adopt a “statutory standing” doctrine in Ohio that would allow standing for a federal statutory claim without the existence of an alleged injury-in-fact.

Background

In 2012 and 2014, OSU hired the plaintiffs as a facility manager and a housekeeper. In October 2015, the plaintiffs, individually and on behalf of a class of others similarly situated, filed suit against OSU under the FCRA. They alleged that as part of their application and hiring process, OSU provided a background check disclosure and authorization to each of them that improperly included extraneous information and a liability release in violation of 15 U.S.C. § 1681b(b)(2)(A)(ii).

The following month, OSU removed the action to the United States District Court for the Southern District of Ohio, Eastern Division, based on federal question jurisdiction. In June 2016, the federal court found that appellants failed to allege that they sustained any injury-in-fact due to OSU’s alleged violations of the FCRA, and that they therefore lacked standing under Article III of the United States Constitution. Consequently, the federal court remanded the matter to the Ohio trial court pursuant to 28 U.S.C. 1447(c).

In July 2016, OSU moved to dismiss the action in the Ohio trial court based on its contention that the appellants lacked standing to bring their claims in Ohio state court because they alleged no injury-in-fact resulting from violations of the FCRA. In response, the appellants argued that Ohio law recognizes standing even in the absence of an injury-in-fact, when that standing is conferred by statute. In February 2017, the Ohio trial court dismissed the appellants’ claims against OSU based on its conclusion that they failed to plead any particularized injury-in-fact and lacked statutory standing to pursue their claims in the absence of a cognizable injury. The plaintiffs appealed.

Appellate Ruling

Noting the instructive ruling by the United States Supreme Court in Spokeo, the Court of Appeals of Ohio stated that the plaintiffs were relying on a concept of “statutory standing” that, according to the plaintiffs, provided standing to sue for a statutory violation “even in the absence of an alleged injury-in-fact.” The appellate court nevertheless disagreed with that argument, adding:

Ohio and federal law have diverged on the issue of whether a party may have standing to sue in the absence of an injury-in-fact. However, even though Ohio courts have, in some circumstances, found standing despite no allegation of concrete injury, appellants fail to cite, and our independent research does not reveal, any case in which an Ohio court has analyzed and found standing to exist on the basis of a federal statute despite the absence of an alleged injury-in-fact.

Ultimately, “[t]o the extent the ‘statutory standing’ doctrine constitutes an exception to the traditional principles of standing in Ohio,” the Ohio appellate court declined “to extend that exception to this circumstance involving the application of a federal statute.”

To find statutory standing here, the court said that it “would need to find that Congress intended to abrogate the Ohio common-law requirements to establish standing.” Yet, “there [was] no indication that Congress intended the pertinent FCRA statute to supplant the traditional requirements of standing in Ohio state court. Further, such a finding would be improper as it would permit Congress to affect the parameters of standing in Ohio courts, even though it is well-settled that Ohio law determines standing in Ohio courts.”

Troutman Sanders will continue to monitor these developments, especially as they relate to Spokeo and its progeny, and provide any further updates as they are available.

Under the reorganization, the eight Divisions providing legal services at NC DOJ consist of Civil (education; insurance; labor; property control; revenue; and legal services to state agencies); Consumer; Criminal; Environmental; Health and Human Services; Litigation; Medicaid Investigations; and Transportation. The functions of the previous Administrative Division have been shifted to other Divisions.

]]>https://www.consumerfinancialserviceslawmonitor.com/2017/12/n-c-attorney-general-josh-stein-reorganizes-doj/feed/0https://www.consumerfinancialserviceslawmonitor.com/2017/12/n-c-attorney-general-josh-stein-reorganizes-doj/GAO Sounds Death Knell for the CFPB’s Key Statement of its “Disparate Impact” Theories in Indirect Auto Financehttp://feeds.lexblog.com/~r/ConsumerFinancialServicesLawMonitor/~3/kjIHPzKam5Y/
https://www.consumerfinancialserviceslawmonitor.com/2017/12/gao-sounds-death-knell-for-the-cfpbs-key-statement-of-its-disparate-impact-theories-in-indirect-auto-finance/#respondWed, 06 Dec 2017 15:12:26 +0000https://www.consumerfinancialserviceslawmonitor.com/?p=6420Continue Reading]]>On Tuesday, December 5, 2017, the Government Accountability Office (“GAO”) levelled a heavy blow on a major regulatory initiative of the Consumer Financial Protection Bureau (“CFPB”): its highly controversial “disparate impact” discrimination theories as applied to pricing in the indirect automobile financing industry. The specific GAO ruling finds that a 2013 “Bulletin” stating the CFPB’s interpretation of the Equal Credit Opportunity Act (“ECOA”) as applied to indirect automobile lending should have been issued as a rule and hence be subject to Congressional review. Under the ruling, the CFPB should have transmitted the Bulletin to Congress for evaluation, but failed to do so.

The GAO’s conclusion that the guidance qualifies as a rule means that the Bulletin must be re-submitted to Congress for review in order for it to become effective. As a result, the Bulletin can no longer be used by government examiners. Given the shift in control of the CFPB to a Trump appointee, chances seem slim that the CFPB would reissue the guidance. Hence, by its narrow finding, the GAO appears to have dealt the Bulletin a death blow.

In March 2013, the Bureau issued CFPB Bulletin 2013-02 to target dealer markups, a practice where an automobile dealer charges a consumer a higher interest rate than the rate by which an indirect lender is willing to purchase the consumer’s retail installment sales contract. The CFPB expressed concern that dealers were being allowed by the indirect lenders to exercise too much pricing discretion, opening the door to discrimination. In the Bulletin, the CFPB contended that it was “likely” to consider an indirect auto lender a “creditor” within the meaning of ECOA, if an indirect lender purchased a contract at an interest rate lower than the rate on the consumer’s contract. The Bureau also announced that it intended to use a disparate treatment or disparate impact theory to examine an indirect auto lender’s ECOA liability for prohibited pricing differences created by the dealer’s pricing activities. Under this view, indirect lenders would have liability for disparate pricing – even though they did not set the pricing and even without evidence that either the lender or the dealer intended to discriminate against anyone. The Bureau’s guidance has had considerable implications for financial institutions, as banks and lenders have seen significant increase in the cost of compliance, not to mention numerous and expensive investigations and settlements with the CFPB, banking regulators, and the U.S. Department of Justice.

The Bulletin has long been the subject of controversy, as many indirect lenders contended that they should not be penalized for unintentional discrimination by dealers. Many also attacked the methodology used to prove disparate impact. In March 2017, Senator Pat Toomey (R-PA) asked the GAO, Congress’ investigative wing, to determine whether the financial guidance issued by the Bureau in 2013 qualified as a “rule.” The GAO concluded that the guidance did qualify as a rule, even though Bulletin 2013-02 is not legally binding. Specifically, the GAO found that:

The Bulletin provides information on the manner in which the CFPB plans to exercise its discretionary enforcement power. It expresses the agency’s views that certain indirect auto lending activities may trigger liability under ECOA. For example, it states that an indirect auto lender’s own markup and compensation policies may trigger liability under ECOA if they result in credit pricing disparities on a prohibited basis, such as race or national origin. It also informs indirect auto lenders that they may be liable under ECOA if a dealer’s practices result in unexplained pricing disparities on prohibited bases where the lender may have known or had reasonable notice of a dealer’s discriminatory conduct. In sum, the Bulletin advised the public prospectively of the manner in which the CFPB proposes to exercise its discretionary enforcement power and fits squarely within the Supreme Court’s definition of a statement of policy.

In conclusion, the GAO found that the Bulletin was subject to the requirements of the Congressional Review Act because it served as “a general statement of policy designed to assist indirect auto lenders to ensure that they are operating in compliance with ECOA and Regulation B, as applied to dealer markup and compensation policies.”

The GAO’s decision renders the Bulletin a nullity until the CFPB properly submits the measure to Congress. Bank examiners, and CFPB examination and enforcement personnel, cannot rely on the Bulletin to guide their supervisory and enforcement activity. Once the CFPB submits the rule – if ever – then Congress is free to challenge the rule under the Congressional Review Act.

“GAO’s decision makes clear that the CFPB’s back-door effort to regulate auto loans, which was based on a dubious legal justification, did not comply with the Congressional Review Act,” said Senator Toomey in a statement. “GAO’s decision is an important reminder that agencies have a responsibility to live up to their obligations under the law. When they don’t, Congress should hold them accountable. I intend to do everything in my power to repeal this ill-conceived rule using the Congressional Review Act.”

However, it is doubtful that the measure will ever make its way to Congress. Under the leadership of Acting Director Mick Mulvaney, it is highly unlikely that the CFPB will work to revive the rule. The Bulletin has long been vilified by many Republicans, as well as some Democrats. In 2015, the House of Representatives passed a bill that would have eliminated the Bulletin, though the measure was not taken up by the Senate.

Troutman Sanders routinely advises clients on the compliance risks posed by direct and indirect auto lending. We will continue to monitor these regulatory developments.

]]>https://www.consumerfinancialserviceslawmonitor.com/2017/12/gao-sounds-death-knell-for-the-cfpbs-key-statement-of-its-disparate-impact-theories-in-indirect-auto-finance/feed/0https://www.consumerfinancialserviceslawmonitor.com/2017/12/gao-sounds-death-knell-for-the-cfpbs-key-statement-of-its-disparate-impact-theories-in-indirect-auto-finance/Consulting New Leadership on Case Against Tribal Lenders, CFPB Obtains Extensionhttp://feeds.lexblog.com/~r/ConsumerFinancialServicesLawMonitor/~3/J6wd0auGjbc/
https://www.consumerfinancialserviceslawmonitor.com/2017/12/consulting-new-leadership-on-case-against-tribal-lenders-cfpb-obtains-extension/#respondTue, 05 Dec 2017 15:05:35 +0000https://www.consumerfinancialserviceslawmonitor.com/?p=6418Continue Reading]]>With President Trump’s pick, Mick Mulvaney, remaining as the Acting Director of the Consumer Financial Protection Bureau, the CFPB has filed a motion asking the United States District Court for the District of Kansas to extend briefing deadlines on a motion to dismiss filed in CFPB v. Golden Valley Lending, Inc., et al., No. 2:17-cv-02521. The Court granted the extension.

The CFPB “s[ought] additional time to consult with new leadership before filing its briefs,” given the “recent leadership changes at the Bureau.” This could prove to be a significant development as the change in administrations has led to delays in other cases, wherein an agency has had to reconsider its posture in litigation under the priorities of new leadership. Commentators have anticipated a less aggressive CFPB under Acting Directory Mulvaney than under outgoing Director Richard Cordray, an appointee of President Obama.

Still, an opposition filed by Golden Valley Lending stated that “the Bureau has indicated to Defendants that it does not expect to change its position in any way,” and it will remain to be seen if or how the CFPB changes its posture under Mulvaney’s leadership.

We will continue to monitor the case for further developments.

]]>https://www.consumerfinancialserviceslawmonitor.com/2017/12/consulting-new-leadership-on-case-against-tribal-lenders-cfpb-obtains-extension/feed/0https://www.consumerfinancialserviceslawmonitor.com/2017/12/consulting-new-leadership-on-case-against-tribal-lenders-cfpb-obtains-extension/Bad Day for Payday Lender: Jury Convicts Online Lender of $220Mhttp://feeds.lexblog.com/~r/ConsumerFinancialServicesLawMonitor/~3/xCLCpi4xLm0/
https://www.consumerfinancialserviceslawmonitor.com/2017/12/bad-day-for-payday-lender-jury-convicts-online-lender-of-220m/#respondMon, 04 Dec 2017 14:21:17 +0000https://www.consumerfinancialserviceslawmonitor.com/?p=6410Continue Reading]]>Recently, a Manhattan federal jury convicted Richard Moseley Sr., the head of an online network of payday lenders and loan servicers, on charges of wire fraud, aggravated identity theft, and violating the Racketeer Influenced and Corrupt Organizations Act and Truth in Lending Act, among other counts.

Moseley was convicted due to his leadership role over a vast and complicated system of interrelated companies that collected over $220 million from more than 600,000 borrowers and deceived regulators in the process. Convincing state and federal regulators and even his own lawyers that his companies were based offshore and not bound by U.S. law, Moseley coordinated a network of lenders and loan servicers that routinely misled both consumers and regulators. At the time of his indictment, then-United States Attorney Preet Bharara stated, “As alleged, Richard Moseley, Sr., extended predatory loans to over six hundred thousand of the most financially vulnerable Americans, charging illegally high interest rates to people struggling just to meet their basic living expenses.”

The indictment alleges that Moseley-related lenders went so far as to autodebit accounts in ways unanticipated by borrowers and lend money to borrowers who did not request it after their personal information was sent to various Moseley companies. Moreover, important terms were hidden in small print, interest rates were charged that violated the laws of the states in which the businesses were operating, and lenders and loan servicers made “deceptive and misleading” fee disclosures to borrowers. The case was originally referred to prosecutors by the Consumer Financial Protection Bureau.

Although Mosely claimed to incorporate his companies in the Caribbean and New Zealand beginning in 2006, the indictment states that Moseley’s companies operated out of Kansas City, Missouri instead. Based on these incorporation claims, Moseley’s attorneys told state regulators that loans from Moseley’s network of lenders and loan servicers originated exclusively from overseas offices. In reliance on this materially false and misleading correspondence, many state attorneys general and regulators closed their investigations on the mistaken belief that they lacked jurisdiction over Moseley’s companies as they supposedly had no presence or operations in the United States.

Moseley, 73, is not scheduled to be sentenced until April 2018, and his RICO and wire fraud convictions carry 20-year maximum sentences. Following news of the jury’s conviction, Acting United States Attorney Joon H. Kim stated, “Moseley can no longer take advantage of those already on the brink, and he now faces significant time in prison for his predatory ways.”

]]>https://www.consumerfinancialserviceslawmonitor.com/2017/12/bad-day-for-payday-lender-jury-convicts-online-lender-of-220m/feed/0https://www.consumerfinancialserviceslawmonitor.com/2017/12/bad-day-for-payday-lender-jury-convicts-online-lender-of-220m/Auto Lending—and Delinquencies—Stay on Upward Trendhttp://feeds.lexblog.com/~r/ConsumerFinancialServicesLawMonitor/~3/9OjxvHP9qp8/
https://www.consumerfinancialserviceslawmonitor.com/2017/12/auto-lending-and-delinquencies-stay-on-upward-trend/#respondSat, 02 Dec 2017 00:48:00 +0000https://www.consumerfinancialserviceslawmonitor.com/?p=6427Continue Reading]]>A recent report released by the Center for Microeconomic Data at the Federal Reserve Bank of New York found that American household debt continues to increase, including debt resulting from automobile loan balances. The third quarter of 2017 saw a $116 billion increase, continuing a march upward since mid-2013.

The report specifically addressed the growth of subprime auto debt, which the New York Fed classified as debt held by borrowers with origination credit scores falling below 620. In total, there are currently 23 million consumers who hold subprime auto loans. While banks tend to finance auto debt originated by borrowers with higher credit scores, auto finance companies have long dominated subprime auto lending, and their shares of this market have only increased in recent years. The New York Fed’s report highlighted three specific areas related to the growth of subprime lending among auto finance companies:

Originations: Auto finance companies historically have held more than 70 percent of subprime auto loans. In 2017, lending to borrowers with lower credit scores has not increased as rapidly as in previous years, but lending to borrowers with higher credit scores has kept pace.

Outstanding Balances: In the third quarter of 2017, auto loan balances increased by $23 billion, with outstanding balances on subprime auto debt currently totaling approximately $300 billion. Auto finance companies, who own a disproportionate share of subprime auto debt, currently hold more than $200 billion, a share that has nearly doubled since 2011.

Delinquency: The delinquency rate for auto finance companies has increased since 2014 by more than two percentage points. The delinquency rate is considerably higher and rising for debt owed to auto finance companies, rather than banks, even when comparing consumers who have roughly the same credit scores.

Troutman Sanders’ Financial Services Litigation practice group has specific expertise in the automotive lending industry and the legal issues these companies face. We maintain a dedicated Auto Finance practice that offers broad industry experience and in-depth subject matter understanding in compliance, litigation, and regulatory matters affecting clients engaged in consumer retail automobile sales, as well as both direct and indirect automobile sales financing. We will continue to monitor trends in the auto finance industry.

]]>https://www.consumerfinancialserviceslawmonitor.com/2017/12/auto-lending-and-delinquencies-stay-on-upward-trend/feed/0https://www.consumerfinancialserviceslawmonitor.com/2017/12/auto-lending-and-delinquencies-stay-on-upward-trend/District Court Rejects Argument that Background Check Disclosure is Not “Standalone” Documenthttp://feeds.lexblog.com/~r/ConsumerFinancialServicesLawMonitor/~3/8Hc-gjNlIkg/
https://www.consumerfinancialserviceslawmonitor.com/2017/11/district-court-rejects-argument-that-background-check-disclosure-is-not-standalone-document/#respondThu, 30 Nov 2017 21:38:27 +0000https://www.consumerfinancialserviceslawmonitor.com/?p=6405Continue Reading]]>The Fair Credit Reporting Act regulates more than credit. It includes provisions that govern employers who obtain consumer reports on applicants in connection with the application process. One such provision deals with the disclosure that an employer must provide to an applicant before obtaining a background check. According to the FCRA, the employer must provide the applicant with a clear and conspicuous disclosure, consisting solely of the disclosure, that a background check will be obtained. In recent years, plaintiffs’ counsel have been developing new, different, and frequently more extreme, theories as to why employers’ documents are not “standalone” disclosures. In Reed v. CRST Van Expedited, Inc., the District Court for the Middle District of Florida rejected one such theory.

In that case, Walter Reed alleged that he interviewed for a trucking position but was not informed that a background check would be procured on him. In response, CRST filed a motion to dismiss, to which it attached Reed’s employment application and the disclosure that he signed. The document included information about the content of the consumer report, Reed’s right to request a copy of the report, Reed’s right to dispute the report, and the companies potentially generating the report. It also included a statement that CRST would provide additional notices.

In analyzing Reed’s claim, the court held that CRST’s disclosure was “clear and conspicuous” and consisted “solely of the disclosure.” The court implicitly concluded that the existence of the information discussed above did not render the disclosure not “standalone.” In other words, the court found that a background check disclosure could inform the consumer of information that is germane to the obtainment and use of the consumer report, while still complying with the “solely of the disclosure requirement.”

The court’s decision in Reed is significant because it applies a commonsense approach to the FCRA’s background check disclosure requirement. While some courts have applied highly technical approaches to what constitutes a “standalone” disclosure, the Reed court implicitly held that a disclosure that informs a consumer that a background check will be obtained, while also including relevant information pertaining to that background check, does not violate the FCRA.

The FCRA poses many traps for unwary employers. In its well-reasoned approach to what constitutes a “standalone” disclosure, the court in Reed prevented the creation of another such trap.

]]>https://www.consumerfinancialserviceslawmonitor.com/2017/11/district-court-rejects-argument-that-background-check-disclosure-is-not-standalone-document/feed/0https://www.consumerfinancialserviceslawmonitor.com/2017/11/district-court-rejects-argument-that-background-check-disclosure-is-not-standalone-document/Bank to Pay $2.8 Million in Consumer Restitution to Settle Alleged Deceptive Fee Practiceshttp://feeds.lexblog.com/~r/ConsumerFinancialServicesLawMonitor/~3/TqX3iNBXxME/
https://www.consumerfinancialserviceslawmonitor.com/2017/11/bank-to-pay-2-8-million-in-consumer-restitution-to-settle-alleged-deceptive-fee-practices/#respondThu, 30 Nov 2017 21:35:35 +0000https://www.consumerfinancialserviceslawmonitor.com/?p=6403Continue Reading]]>The Board of Governors of the Federal Reserve System recently issued a Consent Order against Peoples Bank, based in Lawrence, Kansas, to settle claims of deceptive residential mortgage origination practices that arose from the bank’s charging of fees in mortgage originations. The Federal Reserve alleged that Peoples told mortgage borrowers that certain additional fees that the borrowers paid as discount points would lower the borrowers’ interest rates. The Federal Reserve’s investigation determined that many borrowers did not, in fact, receive a reduced interest rate. The Federal Reserve alleged this practice violated Section 5 of the Federal Trade Commission Act (“FTC Act”).

The Consent Order requires Peoples to pay approximately $2.8 million into an account to be used to provide restitution to the borrowers. Additionally, Peoples must develop a plan that provides for restitution to each borrower who, in the course of obtaining a mortgage loan from Peoples, paid discount points that did not reduce the borrowers’ interest rate. The Consent Order also requires Peoples to avoid any future violation of Section 5 of the FTC Act.

]]>https://www.consumerfinancialserviceslawmonitor.com/2017/11/bank-to-pay-2-8-million-in-consumer-restitution-to-settle-alleged-deceptive-fee-practices/feed/0https://www.consumerfinancialserviceslawmonitor.com/2017/11/bank-to-pay-2-8-million-in-consumer-restitution-to-settle-alleged-deceptive-fee-practices/Join Us for a Complimentary Webinar: Preserving and Protecting Confidentiality when Sharing Information with Regulatorshttp://feeds.lexblog.com/~r/ConsumerFinancialServicesLawMonitor/~3/T0Act37gqb8/
https://www.consumerfinancialserviceslawmonitor.com/2017/11/join-us-for-a-complimentary-webinar-preserving-and-protecting-confidentiality-when-sharing-information-with-regulators/#respondThu, 30 Nov 2017 16:09:05 +0000https://www.consumerfinancialserviceslawmonitor.com/?p=6397Continue Reading]]>On Tuesday, December 12, from 3-4 p.m. ET, Join Troutman Sanders for a webinar focused on a practical issue of great importance to mortgage loan originators and servicers: how to ensure confidential information is protected, when faced with an investigation by state or federal regulators.

The webinar will (1) outline the common law principles and statutory provisions implicating confidentiality for companies being investigated by federal and state regulators; (2) provide practical guidance on how to secure confidentiality agreements from regulators; and (3) discuss key provisions that should be incorporated into any confidentiality agreement with a regulator. This webinar will benefit counsel providing advice and analysis in litigation, compliance, and regulatory matters.

]]>https://www.consumerfinancialserviceslawmonitor.com/2017/11/join-us-for-a-complimentary-webinar-preserving-and-protecting-confidentiality-when-sharing-information-with-regulators/feed/0https://www.consumerfinancialserviceslawmonitor.com/2017/11/join-us-for-a-complimentary-webinar-preserving-and-protecting-confidentiality-when-sharing-information-with-regulators/Ninth Circuit: ESPN App User Data is Not Personal Informationhttp://feeds.lexblog.com/~r/ConsumerFinancialServicesLawMonitor/~3/UHPvJJD5xGY/
https://www.consumerfinancialserviceslawmonitor.com/2017/11/ninth-circuit-espn-app-user-data-is-not-personal-information/#respondThu, 30 Nov 2017 15:37:23 +0000https://www.consumerfinancialserviceslawmonitor.com/?p=6412Continue Reading]]>In an opinion issued November 29, the Ninth Circuit Court of Appeals affirmed the dismissal of Chad Eichenberger’s lawsuit against ESPN for allegedly disclosing personal information. The suit was originally filed in federal court in the District of Columbia in March of 2014, alleging that ESPN gave the personally identifiable information of consumers who watched the WatchESPN app on Roku to an Adobe Systems analytics unit in violation of the Video Privacy Protection Act of 1988. The VPPA prohibits a “video tape service provider” from knowingly disclosing “personally identifiable information concerning any consumer of such provider.”

The information given to Adobe by ESPN included individuals’ Roku device serial numbers and the identity of videos watched on the app. Adobe then used the information to identify specific consumers with existing information from a source other than ESPN. The Ninth Circuit rejected ESPN’s argument that Eichenberger did not have standing to sue, reasoning that “[e]very disclosure of an individual’s ‘personally identifiable information’ and video-viewing history offends the interests that the [VPPA] protects.” Nevertheless, the Ninth Circuit affirmed the lower court’s dismissal, concluding that the information obtained was not personally identifiable information.

The court reasoned that “personally identifiable information” must be more than information that simply shows an individual has watched certain videos—it must be information that actually can be used to identify an individual. Without the existing information in Adobe’s system, which included “email addresses, account information, or Facebook profile information, including photos and usernames,” no “ordinary person” could readily identify the particular individual who watched the videos. This “ordinary person” standard was set forth in a Third Circuit decision, In re Nickelodeon Consumer Privacy Litigation, 827 F.3d 262, 285 (3d Cir. 2016).